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PH a “Rising Star” amidst Economic Downturn

Philippine has a Steadfast Economy

Notable personalities from Moody’s Investors Service recently shared their insights about the current state of the economy of the Philippines.

One of the debt watcher firm’s divisions said the country is a "rising star" in a depressed global economy. They also said if improvements in business and governance policies continue, the country can mature by eight percent by 2016.

Meanwhile, Glenn Levine, Senior Economist at Moody’s Analytics, said the Philippines could post between 6.5 percent and 7 percent growth this year up to 2014, both hitting the projected figures of the government.

He added that the Philippines already had accessed easy opportunities but if reforms continue, the country could achieve a growth rate of eight percent by 2016.

The current administration’s projections vs. medium-term targets are 6-7 percent for 2013, 6.5- 7.5 percent next year, 7-8 percent in 2015, and 7.5-8.5 percent three years from now.

Moreover, Levine said the increased spending of the government on infrastructure and office space can lead to "sustainable" growth.

The business process outsourcing (BPO) sector is predicted to counterbalance some weakening exports such as the trade of electronics, which posted a drop of 9.4 percent.

Another concern is the struggling inflation environment of the Philippines that has prompted the Bangko Sentral ng Pilipinas (BSP) to exert extra effort in reinforcing the flagging lending activities and improving growth.

For this year’s first quarter, inflation is at 3.2 percent, which is almost at the bottom of the 3-5 percent projection of BSP for the year. In line with that, consumer prices increased at an average rate of 3.2 percent last year and the overnight borrowing rate is at its lowest with 3.5 percent.

However, the recent investment grade rating upgrade from Fitch Ratings was cited to be the Aquino government’s "greatest achievement".